How is Executive Compensation Handled in a Miami Divorce?
Dividing marital property is one of the more challenging aspects of high net-worth divorces, especially if one spouse is an executive. When our clients and their spouses are paid by salary, determining and dividing the income is fairly easy. But executives often get paid in stock options, restricted stock options, bonuses, and deferred compensation. These types of compensation could represent millions of dollars and make up the bulk of an executive’s annual income. Various questions can arise over how much of an executive’s compensation has vested, as well as its value.
Contact Hamilton O’Neill. We have worked with many executives and their spouses with complex compensation packages. Our firm knows how Florida’s divorce laws will determine the characterization and division of this compensation.
Executive Compensation and Your Florida Divorce
Many executives have a modest base salary, but they receive considerable compensation in the form of stock options, signing bonuses, profit sharing, carried interest, phantom equity, and Golden Parachute packages.
Generally, any income earned while married but before filing for divorce is considered “marital” and divided fairly (equitably). However, some income like deferred compensation can make the equitable distribution of income complicated, depending on when you separated. A question might arise as to whether some or all of your compensation for the year counts as marital and is subject to division.
Our lawyers will analyze the income package to determine what compensation is marital. Some questions we ask include:
- Were stock options or restricted stock options granted during your marriage, even if they have not yet vested?
- On what date are you entitled to receive deferred bonuses?
- When did you receive a signing bonus? Before marriage?
- Did you earn any benefits because of shared marital effort?
Another critical issue is determining the value of your compensation. If stock options are marital, then Hamilton O’Neill will need to analyze how much they are worth, which can fluctuate depending on the company.
If issues of complex compensation packages apply to you or your spouse, you will want to work with a law firm that has helped many executives in their divorces. We know how the law will determine both the value and whether certain compensation is put in the “pot” with other marital property. Hamilton O’Neill understands the unique challenges business executives or their spouses face when they decide to divorce.
Executive compensation can also complicate the calculation of child support if you have minor children. For example, your spouse could have a high but stable income but your executive compensation is irregular and heavily dependent on the value of the company. A judge could struggle to identify your income for purposes of calculating your share of child support if you do not have an experienced lawyer presenting the evidence through expert forensic accountant testimony. There is always a risk a judge will impute too much income and hand down a hefty child support bill based on faulty assumptions.
Contact Hamilton O’Neill for Assistance
Our firm helps high-profile executives and entrepreneurs and their spouses in divorce and other family law disputes, including paternity disputes. Individuals with a high net-worth have different needs and expectations. The best choice in a divorce lawyers are those that have handled many family law disputes for high net-worth individuals. Call our law firm to speak personally with a Miami asset division lawyer. We have the experience and discretion needed to provide effective advocacy.